Vista Outdoor on .22 Ammo: Supply up, Demand Down, Price Down

The new .22 rimfire plant in Lewiston, Idaho, is on line. Vista Outdoors owns the CCI and Federal rimfire brands. They have increased production for both brands by 20 percent. With end of the Obama administration, the .22 ammunition bubble is deflating. Most stores have ammunition available. Prices are coming down. From the Lewiston Tribune, November 10th, 2017:

Parts of Vista's approach have worked well, such as investing in infrastructure and preserving market share, Metz said.

Vista recently debuted a new, 37,000-square-foot, $35 million rimfire ammunition plant near the Lewiston-Nez Perce County Regional Airport, which has resulted in what company officials describe as a "very satisfying" reduction in the time needed to complete an order.

"It pays dividends when you come out of the trough," Metz said. "We're able to make some changes in our facilities that will enable us to participate really strongly as the market returns."

Vista Outdoor has reduced ammunition prices to maintain market share as its customers work through stockpiles they amassed under the administration of Barack Obama - when they feared new regulation that never came to pass."We're the market leader in rimfire," Nolan said. "Brand preference in ammunition tends to be somewhat sticky. It took us a long time to gain our market share. ... We are loathe to cede that during a period of challenging pricing because it's going to be very difficult to get that back."

 The ammunition manufacturers, such as Vista Outdoors, do not want to lower prices. As with any manufacturer, life is easy and smooth when both prices and demand are high. But the market does not guarantee that prices and demand will remain high. Only force, in the form of government granted monopolies, or collusion, as with the OPEC cartel, can do that. Neither of those things exist in the United States, where a mostly free market in ammunition is enforced.

The CCI and Federal brands have an enviable reputation for reliability and quality. They have customer loyalty because of that.  Stephen Nolan refers to this when he speaks of brand preference being "somewhat sticky".  Market competition works. Aguila of Mexico saw opportunity and increased their production before Vista Outdoors did. Aguila almost doubled their production to capture some of the increasing American market. That is reflected in the availability and price structure seen today.  Aguila's brands are at the lowest price point in the market. Vista has to reduce prices to keep market share. Federal low price brands are in direct competition with Aguila.

The lowest prices are now at 3.7 - 4 cents per round.

Prices are going to continue to fall. If you look at the prices on the old Remington box, it was purchased on sale at less than 2 cents per round. I will not be surprised if we see prices at or below 2 cents per round, at sporadic sales, before the end of President Trump's term.

For those looking for even lower prices, look for estate sales. Prices of ammunition at estate sales are going to be in the basement. Because of liability, gun stores will not buy ammunition back from private owners.

Many people who inherit ammunition are afraid of it, know nothing about guns, and want to get rid of it. I have heard of thousands of dollars of ammunition being turned in to police to be destroyed.

Many people bought thousands of rounds of ammunition in the last four years.

©2017 by Dean Weingarten: Permission to share is granted when this notice and link are included.

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